Political scientist: Tax cut talk by Perry is ‘win-win situation’

Last week’s push by Gov. Rick Perry for lawmakers to cut taxes this session is very good politics, even if strong fiscal conservatives who want tax cuts and who vote in GOP primaries are likely to be a bit disappointed, according to Rice University political scientist Mark Jones.

“The thing he has to avoid more than anything else is being outflanked by [Attorney General] Greg Abbott on the right,” Jones said of Perry, anticipating next year’s governor’s race. “This clearly helps position him in a very comfortable place on the right. … There is no one who can realistically challenge Perry or represent any threat other than Greg Abbott.”

Attempts by some House GOP leaders to tamp down the tax cut exuberance only play into Perry’s hands, Jones said.

“It’s really a win-win situation for Perry because it allows him to symbolically signal to fiscal conservatives in the party that he’s on their side. And if it ends up not happening he can always blame [Speaker] Joe Straus and [Dallas Rep.] Dan Branch.”

Though some other experts disagree, Jones said significant moves to reduce taxes are unlikely.

“It will either be symbolic or nothing at all,” he.

Jones was interviewed for this story in today’s Dallas Morning News about how some GOP state leaders’ calls for tax cuts are going to add to a squeeze facing budget writers: After their bare-bones budget bills are filed on Monday or Tuesday, as starting points for debate, there will be about $5 billion of general-purpose state revenue available that is not encumbered. Competition for that money should be fierce. Different lawmakers will push tax cuts, an end to accounting gimmicks, undoing of huge cuts made last session and socking away money for compliance with an eventual decision in school-finance lawsuits.

Just to put the $5 billion of “play money” into perspective, former gubernatorial budget adviser Dale Craymer noted that when lawmakers gave school districts enough money in 2006 to cut property tax rates by one-third, the tab for state taxpayers was $7 billion.

“The biggest sore thumb this state has is property taxes, and what we learned in 2006 and 2007 is that you can throw $7 billion into property tax relief, and a lot of folks didn’t notice it,” said Craymer, president of the business-backed Texas Taxpayers and Research Association.

Likewise, he said small business owners who’ve been exempt from the revamped business-franchise tax, because they have gross receipts of under $1 million, will show little gratitude to lawmakers if they agree to forego $150 million of potential tax revenue per budget cycle to lock in the $1 million exemption as permanent.

It just shows how hard it will be to pass a tax cut with big political payoff, though Craymer said he expects a tax-reduction package of some kind to pass. It’s possible, divvying the $5 billion between spending increases and tax cuts, to pass tax cuts that help the state economy, he said.

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The blog for the Dallas Morning News politics team tracks Dallas Fort Worth area, Texas and national campaigns.